Mark Pervan, a senior commodity strategist with the ANZ Bank in Melbourne, said: "The whole market has lost confidence in everything.

"Everyone is worried about global growth, and oil is the front line commodity for that. There's just a lot of panic and fear in the market."

"The whole market has lost confidence in everything"

Mark Pervan, ANZ Bank strategist

The sharp falls came despite news that Opec ministers (the Organisation for the Petroleum Exporting Countries) will hold an emergency meeting next month on the impact of the markets crisis - amid speculation that the crude producers' cartel could cut its supplies to artifically keep oil prices higher.

Gordon Brown, the British prime minister, said that a cut in output would be "wrong for the world economy".

"I'm concerned when I hear that the Opec countries are meeting, or about to meet, to discuss cutting production, in other words making the price potentially higher than it should be.

"It would be wrong for the world economy ... for Opec to cut production and therefore keep prices high," he said.

Opec decided to cut its production of 520,000 barrels of oil per day at its last meeting in September, to sustain oil prices above $100 a barrel.

Crude prices have since plunged dramatically sending officials from Opec into crisis mode.

Falling demand

"The deteriorating outlook for world growth is leading to a violent correction in commodity prices," Martin Lewis, a Deutsche Bank analyst said.

"Further deterioration in the global GDP [gross domestic product] outlook could act as a trigger for lower oil prices," he said, adding that prices could fall to about $60 a barrel.